Towards Economic Equity: Wealth Taxes and UBI

In recent decades, the United States has struggled with economic inequality and stratification that has persisted at concerning levels despite the modern enforced progressive income tax. While the current tax system theoretically aims to fairly tax each level of income earners, the wealthiest Americans hold much of their earnings in capital gains and investments, which are taxed at lower rates than the wages of the lower classes. Legislation like the 2017 Tax Cuts and Jobs Act further exacerbated wealth concentration at the top 1%, suggesting the importance of exploring new taxation and distribution methods to lessen the widening wealth gap. This paper explores the potential of a wealth tax as one such method, considering its ability to fund redistribution programs (specifically a Universal Basic Income), promote economic equality, and induce economic mobility. Utilizing an equitable taxation method like a wealth tax to fund a UBI approach facilitates a transparent policy of promoting equity and stability, emphasizing a tangible way the government can assume its role of mitigating wealth inequality. The double-pronged nature of the strategy creates a straightforward mechanism for redistribution and helps the public better understand how social support programs are financed. The study investigates common criticisms of both a wealth tax and UBI, laying out policy implementation suggestions and linking the proposals to a future of economic growth. The paper ultimately suggests that through a combined wealth tax and UBI strategy, U.S. policymakers can stimulate economic activity from all classes and simplify aspects of the current welfare system to efficiently mitigate the drastic income inequality our nation faces.